Lunchtime Links 8-25

The boy who heard too much (Rolling Stone) “He was a 14-year-old blind kid, angry and alone. Then he discovered that he possessed a strange and fearsome superpower — one that put him in the cross hairs of the FBI.”

Deutsche Bank plans Tier 1 issue (Reuters) If my reading here is correct, then the pollution of the capital structure continues. For a long time I’ve argued tangible common equity is the best cushion protecting bank balance sheets. Being in the first loss position, it’s the buffer preventing capital structures from collapse. But bank regulators focus on so-called Tier 1 capital, not TCE, which can include preferred securities that sit above the first loss position. Banks prefer to issue preferred stock because issuing more common dilutes shareholders. As Paul Miller at FBR has written in his research, bank capital structures disintegrated last fall because so much of the capital they’d raised in ’07 and early ’08 was preferred as opposed to common.

Should Libertarians defend bank bailouts (Atlantic) I’m a big fan of Megan McArdle’s work, but this is not her best. She tries to back opponents of bailouts into a corner, suggesting as so many do nowadays, that there was really no alternative. She neglects to mention recapitalizations. Earlier this year banks could and should have been recapitalized, forcing losses from the asset side of the balance sheet onto shareholders and junior creditors.

Wall St. pay disclosure looms as flash point (Reuters) Speaking of FOIA requests, Reuters wants to know details about what TARP recipients plan to pay their execs. The recipients have submitted proposals to Ken Feinberg, but at present there are no plans to make this public. The quote from the executive compensation lawyer is a hoot. His clients would be horrified(!) if their pay packages were disclosed in the press. It would affect their ability to “raise their kids.” Doesn’t your heart just bleed for kids who would be faced with the traumatic knowledge that daddy makes $25 mil? This is a bad argument anyway, big corporate pay packages are disclosed every year in the proxy filings of every public company in America.

There go the servers: Lightnings new perils (WSJ) An interesting map in the middle of the article shows the biggest areas for lightning. I lived in Tampa/St. Pete for a bunch of years and boy do I remember some spectacular light shows. I also remember lightning strikes within a block of me on 3 separate occasions.

Retaliating against junk mailers (officeofstrategicinfluence) Mail ’em a brick with a postage paid envelope attached to a box. I can’t imagine the USPS would let this fly, but the guy who wrote the post says it does….